Calculating the Tax
The basic principles are quite straightforward :-
Net Gain = Sale proceeds - costs.
(To compute costs it's what you paid, and you can take into account any transaction fees involved in the original purchase, and any transaction costs incurred in the sale, e.g. estate agency fees).
If the net gain this is less than your Annual Exemption, no tax to pay.
If it is more, then you pay tax on the excess.
Calculating acquisition costs for Gifts and Inheritances:-
Gifts that were exempt at time of transfer - you will need the original costs.
Inheritances - the probate value.
Cases where costs are unknown will require a discussion with the Inland Revenue, but we may be able to help, at least for assets where the is public information available such as stocks and shares.
Last updated on April 7, 2010